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Governor vetoes consulting contract reform

Published: Tuesday, June 24, 2014 at 1:36 p.m.

Last Modified: Tuesday, June 24, 2014 at 7:58 p.m.

Gov. Bobby Jindal on Friday vetoed a bill aimed at cutting state consulting contracts to give money to higher education.

House Bill 142 by Rep. Dee Richard, a Thibodaux independent, provided that all contracts totaling $40,000 or more of general fund and over-collections fund dollars would go to the Joint Legislative Committee on the Budget for final approval. The joint budget committee would then approve the contract and ask for revisions, or reject the contract and direct the savings to higher education.

Richard could not be reached for comment.

“House Bill No. 142 could hinder the state’s efforts to continue to provide its citizens with timely, high quality services,” Jindal wrote in his veto. “Its arbitrary and burdensome process could cause significant delays and introduce uncertainty to executing a contract, which would make contracting with the state difficult and discourage businesses from seeking opportunities to provide services to the people of Louisiana.”

The bill unanimously passed the House, 98 to 0, and Senate, 37 to 0, and was supported by many university faculty senates.

“I am ... disappointed that we will continue to waste money on frivolous, overly expensive consulting contracts to the detriment of our taxpayers and higher education funding,” Treasurer John Kennedy said in a written statement Tuesday.

Jindal argued cutting state contracts doesn’t eliminate the state’s obligation to provide the services outlined in the contracts. State contracts have shrunk by more than $730 million since 2008. The bill would require reductions in contracts involving the departments of Health and Hospitals, Corrections and Children and Family Services, which receive a majority of consulting contracts.

However, Jindal said he supports increasing spending for higher education, citing a 6.9 percent increase in spending for education in 2015.

“But the fundamental flaws and unintended consequences of the legislation are far too serious,” he said.

According to Kennedy, Louisiana spent $1.6 billion from its general fund on higher education in 2008, reaching the southern average for the first time in 25 years. This year’s general fund spending for higher education is $525 million — a 67 percent reduction.

Even after taking into account tuition and fee increases on students and parents, total funding on higher education is down $353 million, Kennedy said.

“State funding for higher education in Louisiana is down 17.6 percent this fiscal year alone — the most dramatic reduction in America — while three-fourths of states have raised their higher education funding,” Kennedy said. “Louisiana’s colleges and universities need money. There’s a way to help them without raising taxes or tuition: reduce spending on state government’s consulting contracts.”

Only contracts under the jurisdiction of the Division of Administration’s Office of Contractual Review for the upcoming fiscal year would have been targeted, Kennedy said. Departments and agencies would have been responsible for deciding what got cut.

Kennedy said he will push for similar legislation next year.

“It took six years to convince the governor to support our new Office of Debt Recovery to collect money owed Louisiana taxpayers, so we will be back with our consulting contracts reform effort next year,” he said.

Staff Writer Jacob Batte can be reached at 448-7635 or jacob.batte@dailycomet.com. Follow him on Twitter @ja_batte.

<p>Gov. Bobby Jindal on Friday vetoed a bill aimed at cutting state consulting contracts to give money to higher education. </p><p>House Bill 142 by Rep. Dee Richard, a Thibodaux independent, provided that all contracts totaling $40,000 or more of general fund and over-collections fund dollars would go to the Joint Legislative Committee on the Budget for final approval. The joint budget committee would then approve the contract and ask for revisions, or reject the contract and direct the savings to higher education. </p><p>Richard could not be reached for comment. </p><p>“House Bill No. 142 could hinder the state's efforts to continue to provide its citizens with timely, high quality services,” Jindal wrote in his veto. “Its arbitrary and burdensome process could cause significant delays and introduce uncertainty to executing a contract, which would make contracting with the state difficult and discourage businesses from seeking opportunities to provide services to the people of Louisiana.” </p><p>The bill unanimously passed the House, 98 to 0, and Senate, 37 to 0, and was supported by many university faculty senates.</p><p>“I am ... disappointed that we will continue to waste money on frivolous, overly expensive consulting contracts to the detriment of our taxpayers and higher education funding,” Treasurer John Kennedy said in a written statement Tuesday.</p><p>Jindal argued cutting state contracts doesn't eliminate the state's obligation to provide the services outlined in the contracts. State contracts have shrunk by more than $730 million since 2008. The bill would require reductions in contracts involving the departments of Health and Hospitals, Corrections and Children and Family Services, which receive a majority of consulting contracts. </p><p>However, Jindal said he supports increasing spending for higher education, citing a 6.9 percent increase in spending for education in 2015. </p><p>“But the fundamental flaws and unintended consequences of the legislation are far too serious,” he said. </p><p>According to Kennedy, Louisiana spent $1.6 billion from its general fund on higher education in 2008, reaching the southern average for the first time in 25 years. This year's general fund spending for higher education is $525 million — a 67 percent reduction.</p><p>Even after taking into account tuition and fee increases on students and parents, total funding on higher education is down $353 million, Kennedy said. </p><p>“State funding for higher education in Louisiana is down 17.6 percent this fiscal year alone — the most dramatic reduction in America — while three-fourths of states have raised their higher education funding,” Kennedy said. “Louisiana's colleges and universities need money. There's a way to help them without raising taxes or tuition: reduce spending on state government's consulting contracts.”</p><p>Only contracts under the jurisdiction of the Division of Administration's Office of Contractual Review for the upcoming fiscal year would have been targeted, Kennedy said. Departments and agencies would have been responsible for deciding what got cut.</p><p>Kennedy said he will push for similar legislation next year. </p><p>“It took six years to convince the governor to support our new Office of Debt Recovery to collect money owed Louisiana taxpayers, so we will be back with our consulting contracts reform effort next year,” he said.</p><p>Staff Writer Jacob Batte can be reached at 448-7635 or jacob.batte@dailycomet.com. Follow him on Twitter @ja_batte.</p>